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Technip and Casale to jointly offer blue hydrogen technology

The companies will offer a process design package, equipment, and entire plants using oxidative reforming, autothermal reforming, and partial oxidation technologies.

Technip Energies (PARIS: TE) and Casale announce a new partnership to jointly license oxidative reforming-based technologies; autothermal reforming (ATR) and partial oxidation (POx) technologies for the blue hydrogen market, according to a news release.

ATR is a process to produce syngas that contains hydrogen, CO and CO2. It becomes cost-effective for low-carbon hydrogen when combined with carbon capture technology and suitable for larger-scale facilities.

As part of this collaboration, Technip Energies and Casale will be co-licensors of the technology and will offer Process Design Package (PDP), proprietary equipment and entire plants. In order to decarbonize hydrogen facilities, the ATR-based solution could achieve up to 99% of carbon capture rate.

Technip Energies’ two centers of excellence for hydrogen, Claremont CA, US and Zoetermeer, NL, will jointly execute with Casale PDP for ATR-based blue hydrogen projects.

Loic Chapuis, SVP gas & low carbon energies of Technip Energies, commented: “We are excited to announce this partnership with Casale, which will allow us to offer cutting-edge ATR-based solutions for the blue hydrogen market. By leveraging our global leadership in hydrogen, having delivered more than 30% of the installed capacity worldwide, with our combined proprietary technologies, we are confident that we can provide advanced and cost-effective solutions that will meet the needs of our customers. ATR-based solutions will be complementary to T.EN’s proprietary SMR-based solutions, allowing us to offer a complete range of solutions in the low-carbon hydrogen market. We look forward to working with Casale to drive innovation and decarbonize hydrogen production at scale.”

Federico Zardi, CEO of Casale SA, said: “We are delighted to enter this partnership with Technip Energies, a global leader in hydrogen plants. This partnership can provide the market with advanced solutions for the decarbonization of the world, leveraging our long history of developing and applying advanced ATR and POx technologies with several ATR-based mega production units already delivered, in combination with Technip Energies’ technological expertise in the hydrogen field.”

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Los Angeles moves forward with $800m green hydrogen conversion

The Los Angeles City Council has authorized the Department of Water and Power to begin contracting processes for converting a gas-fired generating station to hydrogen.

The Los Angeles City Council has unanimously approved a motion to move forward with the the conversion of the gas-fired Scattergood Generating Station near El Segundo to hydrogen, according to a vote record posted on the city’s website.

Subsequent coverage in the Los Angeles Times states that the city has plans to converting additional regional gas facilities — Harbor and Haynes and Valley Generating Station – into hydrogen-fueled peaking power stations.

Environmentalists have grouped to oppose the plan based on expressed climate and safety concerns.

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bp buys US travel center operator for $1.3bn

The purchase of TravelCenters of America will allow bp to expand new mobility offers including EV charging, biofuels, RNG and later hydrogen.

BP Products North America Inc., a wholly-owned indirect subsidiary of BP p.l.c. has reached an agreement to purchase TravelCenters of America, one of the country’s leading full-service travel center operators, for $1.3bn in cash.

TA’s strategically-located network of highway sites complements bp’s existing predominantly off-highway convenience and mobility business, enabling TA and bp to offer fleets a seamless nationwide service. In addition, bp’s global scale and reach will, over time, bring advantages in fuel and biofuel supply as well as convenience offers for consumers. It will provide options to expand and develop new mobility offers including electric vehicle (EV) charging, biofuels, renewable natural gas (RNG) and later hydrogen, both for passenger vehicles and fleets.

Goldman Sachs & Co. LLC is acting as lead financial adviser to bp, Robey Warshaw LLP is acting as financial adviser to bp, and Sullivan & Cromwell LLP is acting as lead legal adviser to bp.

Convenience is one of bp’s five strategic transition growth engines in which it aims to significantly grow investment through this decade. By 2030, bp aims for around half its annual investment to go into these transition growth engines. Over 2023-2030 it aims that around half of its cumulative $55-65bn transition growth engine investment will go into convenience, bioenergy and EV charging.

Bernard Looney, CEO bp, said: “This is bp’s strategy in action. We are doing exactly what we said we would, leaning into our transition growth engines. This deal will grow our convenience and mobility footprint across the US and grow earnings with attractive returns. Over time, it will allow us to advance four of our five strategic transition growth engines. By enabling growth in EV charging, biofuels and RNG and later hydrogen, we can help our customers decarbonize their fleets. It’s a compelling combination.”

The acquisition is expected to bring around 280 TravelCenters of America sites, spanning 44 US states nationwide, into the bp portfolio. These travel centers, which average around 25 acres, offer a full range of facilities for vehicles and fleet trucks, including more than 600 full-service and quick service restaurants, as well as truck maintenance and repair services. Around 70% of TA’s total gross margin is generated by its convenience services business, almost double bp’s global convenience gross margin.

Dave Lawler, chairman and president of bp America: “Subject to approvals, we look forward to welcoming the TA team to bp. TA’s amazing nationwide network of on-highway locations combined with bp’s more than 8,000 off-highway locations have the potential to offer travelers and professional drivers a seamless experience for decades to come.”

bp yesterday announced plans to invest $1bn in EV charging across the US by 2030.

As part of the transaction, TA will enter into amended lease agreements with Service Properties Trust, establishing long-term real estate access. bp looks forward to continuing TA’s existing strong relationship with SVC.

The acquisition price of $1.3bn, or $86 per share, represents a multiple of around 6 times based on last twelve months’ TA EBITDA (4Q21 to 3Q22).  It is expected to add EBITDA for bp immediately, growing to around $800m in 2025.

It supports delivery of bp’s convenience and EV charging growth engine target of more than $1.5bn EBITDA in 2025 and aim for more than $4bn in 2030. bp expects the acquisition to be accretive to free cash flow per share from 2024 and to deliver a return of over 15%.

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Clean Vision chooses West Virginia for $50m hydrogen facility

The Nevada-based company will leverage a $50m total investment in a manufacturing facility converting plastic feedstock into precursors for recycled content plastics and clean fuels, including hydrogen.

Clean Vision Corporation has signed a Memorandum of Agreement to collaborate on a manufacturing facility focused on recycling plastic feedstock into precursors for recycled content plastics and clean fuels, according to a news release from the governor.

The MoA is between the company’s Clean-Seas West Virginia subsidiary and the West Virginia Department of Economic Development. The total investment is $50m over three years.

Upon completion of construction and commencement of operations, the facility, located in Quincy in eastern Kanawha County, will process plastic for conversion to clean energy at a rate of 100 tons per day, starting in 2024, with plans to scale up to 500 tons per day over time.

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Advisor Profile: Cameron Lynch of Energy & Industrial Advisory Partners

The veteran engineer and financial advisor sees widespread opportunity for capital deployment into early-stage renewable fuel companies.

Cameron Lynch, co-founder and managing partner at Energy & Industrial Advisory Partners, sees prodigious opportunity to pick up mandates in the hydrogen sector as young companies and early movers attract well-capitalized investors looking for auspicious valuations.

The firm, a three-year-old boutique investment banking outfit with offices in New York and Houston, is broadly committed to the energy transition, but is recruiting for new personnel with hydrogen expertise, Lynch said, adding that he is preparing for a new level of dealmaking in the new year.

“I think we can all expect 2023 will be even more of a record year, just given the appetite for hydrogen,” Lynch said. “Hydrogen is one of our core focuses for next year.”

Cameron Lynch

Lynch started his career as a civil & structural engineer and moved into capital equipment manufacturing and leasing for oil & gas, and also industrial gasses –things like cryoge

nic handling equipment for liquid nitrogen. He started the London office of an Aberdeen, U.K.-based M&A firm, before repeating that effort in New York.

Founding EIAP, Lynch and his business partner Sean Shafer have turned toward the energy transition and away from conventional energy. The firm works on the whole of decarbonization but has found the most success in the hydrogen space.

Earlier lifecycle, better valuations

Hydrogen intersects with oil& gas, nuclear, chemicals, midstream companies, and major manufacturing.

Large private equity funds that want to get into the space are realizing that if they don’t want to pay “ridiculous valuations for hydrogen companies” they must take on earlier-stage risk, Lynch said.

Interest from big private equity is therefore comparatively high for early-stage capital raising in the hydrogen sector, Lynch said, particularly where funds have the option to deploy more capital in the future, Lynch said.

“They’re willing to take that step down to what would normally be below their investment threshold.”

Lynch, who expects to launch several transactions in the coming months with EIAP, has a strong background in oil & gas, and views hydrogen valuations as a compelling opportunity now.

“It’s very refreshing to be working on stuff that’s attracting these superb valuations,” Lynch said.

There’s a lot of non-dilutive money in the market and the Inflation Reduction Act has been a major boon to investors, Lynch said. For small companies, getting a slice of the pie is potentially life changing.

Sean Shafer

The hydrogen space is not immune to the macroeconomic challenges that renewables have faced in recent months and years, Lynch said. But as those same challenges have accelerated the move toward energy security, hydrogen stands to benefit.

Supply chain issues post-COVID pose a potential long-term concern in the industry, and equity and debt providers question the availability of compressors and lead times.

“I would say that’s one of the key issues out there,” Lynch said. There’s also the question of available infrastructure and the extent to which new infrastructure will be built out for hydrogen.

EIAP sees the most convincing uses for hydrogen near term in light-weight mobility and aerospace, Lynch said. The molecule also has a strong use case in back-up generation.

Hydrogen additionally presents companies in traditional fossil fuel verticals the opportunity to modernize, Lynch said, citing a secondary trade EIAP completed earlier this year

California’s Suburban Propane Partners acquired a roughly 25% equity stake in Ashburn, Virginia-based Independence Hydrogen, Inc. The deal involved the creation of a new subsidiary, Suburban Renewable Energy, as part of its long-term strategic goal of building out a renewable energy platform.

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Renewables developer exploring move into green hydrogen

North Carolina-based Strata Clean Energy is engaged with engineers and consultants in preparations for a potential move into the production of green hydrogen.

Strata Clean Energy, the North Carolina-based utility-scale renewables developer, is researching locations in the U.S. where it could potentially build a green hydrogen production plant, executives said in an interview.

“We’ve been doing some hydrogen work for the past few years,” said Tiago Sabino Dias, former CEO of Crossover Energy, which was acquired by Strata in a deal announced this week. That forward momentum on green hydrogen and other areas of the energy transition was part of the reason the deal with Strata was made, he said.

Sabino Dias is now the senior vice president of origination at Strata following the takeover.

“We’ve done a lot of work thinking about where the high-value locations are,” Strata’s Chief Development Officer Josh Rogol said in a separate interview.

Hydrogen is adjacent to Strata’s core competencies in energy storage, Rogol said. The company is confident it could supply the green kilowatt hours for hydrogen production and is researching offtake scenarios in transportation and industrial uses.

Strata has a 13 GW project pipeline of standalone and combined solar and storage, according to its website, with 4 GW under management.

The company’s IPP has about 1 GW with ambitions to grow, Rogol said. It’s go-forward pipeline comprises more than 100 projects across 26 states.

Strata is now engaged with several consultants and engineers to explore green hydrogen opportunities, Rogol said. The company is open to new advisory relationships across verticals.

“We think we are really well positioned to be both the energy supplier, as well as the molecule producer,” Rogol said. The capabilities and intellectual property acquired through Crossover put the firm six to 18 months ahead of other nascent developers.

Early-stage development in green hydrogen can be funded with Strata’s balance sheet, similar to Strata’s bilateral takeover of Crossover, Rogol said. Later stage development and EPC will require “an ecosystem of partners” potentially both financial and strategic, he added.

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California renewables developer taps advisor for capital raise

Utility-scale solar and storage developer RAI Energy has tapped an advisor for a capital raise. The company is evaluating co-development conversion for green ammonia production at projects in Arizona and California.

RAI Energy, the utility-scale solar and storage developer, has hired an advisor as it pursues a capital raise.

The company is working with Keybanc Capital Markets in a process to raise up to $25m, according to two sources familiar with the matter.

In an interview, RAI Energy CEO and owner Mohammed S. Alrai said the company “is excited about having [Keybanc] act as our financial advisors on this fundraising round.” He noted that RAI is first a solar-plus-storage developer and is approaching investors as such.

However, RAI is evaluating co-development conversion for green ammonia production at two of its project sites in Arizona and California, he said.

“Hydrogen is a natural next step,” Alrai said of his company, adding that the end-product would be green ammonia for use in fertilizer production and industrial sectors. Pure hydrogen could also be kept for use in transportation.

A variety of partnerships would be required to develop hydrogen at RAI’s solar sites, Alrai said. The company could need advisory services to structure those partnerships.

RAI is working with engineers on the hydrogen question now and is open to additional technology and finance advisory relationships, he said. The company is also evaluating several electrolyzer manufacturers.

“It’s an open book for us right now,” Alrai said of hydrogen production. “We’re always open to talking to people who can help us.”

For hydrogen project development, RAI would seek project level debt and equity similar to its solar developments, Alrai said. Early-stage project sites in Colorado and New Mexico could also be candidates for hydrogen co-development.

Keybanc delined to comment for this story.

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